City Research Online

Abstract

The paper investigates the effect of vessel specific and market variables on the probability of scrapping dry bulk ships of different sizes. Using a 2012-2015 dataset, we find that, the probability of scrapping increases with age, but that the relation between vessels size and scrapping probability varies across the different segments. That is, the scrapping probability is lower for larger vessels in size segments where there is a trend towards building larger vessels. In addition, while the relation between earnings and probability of scrapping ships is negative, bunker prices seem to only affect the scrapping rate of smaller tonnage.

Publication Type:	Conference or Workshop Item (Paper)
Additional Information:	Published in final form: Alizadeh-Masoodian, A., Strandenes, S.P. & Thanopoulou, H. (2016). Capacity retirement in the dry bulk market: A vessel based logit model. Transportation Research Part E: Logistics and Transportation Review, 92, pp. 28-42. © 2016, Elsevier. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/.
Publisher Keywords:	capacity retirement, scrapping probability, dry bulk market, logit, shipping crisis
Departments:	Bayes Business School > Finance

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